FROM PAGE B1

The regulator said interests of the unitholders of those mutual funds were violated when Tk 68.64 crore of their funds was invested in a closed company.

It also found evidence of collusion between former BSEC chairman Shibli and LR Global CEO Reaz Islam in securing approval for the unlawful investment.

Following an investigation, the BSEC imposed a lifetime ban on both individuals from any capital market activity.

The commission also fined Reaz Islam, Rezaur Rahman Sohag, Brig Gen (retired) Sharif Ahsan, Medina Ali, Syed Kamrul Hoda, and Omar Soeb Chowdhury Tk 1 crore each for violating securities rules. All of them are representatives of the mutual funds.

The Daily Star immediately could not reach them for comments.

Besides, LR Global has been asked to return Tk 90 crore, including interest, to the six mutual funds within one month. The regulator warned that if the funds were not repaid in time, CEO Reaz Islam would be liable to pay Tk 98 crore, while directors George M Stock III and Rezaur Rahman Sohag would each face a Tk 1 crore fine.

The BSEC also decided to revoke LR Global’s licence for investing in a financially weak company whose operations had ceased and which had a negative net asset value.

In addition, the regulator has fined Bangladesh General Insurance Company (BGIC), trustee of those six mutual funds, Tk 3 crore for failing to protect investor interests.

It also decided to ask the Financial Reporting Council (FRC) to take action against Shafiq Basak & Co for not preparing a proper audit report on Quest BDC Ltd for the financial year ending in June 2023.

The BSEC investigation further found that Quest BDC Ltd, formerly Padma Printers, had invested Tk 24.95 crore in Thyrocare Bangladesh by purchasing shares at Tk 52.25 each, though the face value was Tk 10.

According to the regulator, the valuation of Thyrocare was conducted by the then managing director of City Bank Capital Resources in collusion with LR Global’s CEO Reaz Islam.

The commission said the manner of the investment raised suspicions of possible money laundering. It has therefore decided to refer the matter to the Anti-Corruption Commission (ACC) for further investigation.